Apr. 25--Even in a soft global economy, Bucyrus International said Friday it continues to have a solid backlog of mining equipment orders.

Much of the demand has come from China, where an economic stimulus plan has increased the need for mined materials such as copper and iron ore.

"If you look at the overall worldwide demand, China is the only market that's showing positive growth year-over-year on any of the commodities. The rest of the world is, obviously, fairly bleak," Tim Sullivan, Bucyrus' president and CEO, said in a conference call with analysts.

The South Milwaukee company posted a 38.5% profit increase in the three months ended March 31.

Net income rose to $56.9 million, or 76 cents a share, from $41.1 million, or 55 cents, in the year-earlier quarter.

Sales increased 17% to $605.7 million as Bucyrus benefited from mining projects in China, Australia, Chile and other countries.

Bucyrus and local competitor Joy Global Inc. make the world's largest mining machines, including electric mining shovels that can lift 100 tons in a single scoop and draglines where the bucket alone is the size of a two-car garage.

As prices of coal, iron ore, copper and other commodities have dropped, mines have pulled back on expansion plans and equipment purchases -- leaving Bucyrus in uncertain territory.

But the company's $2.34 billion order backlog is down only about 6% from the end of 2008.

"We are pleased by the backlog," Sullivan said.

"We are continuing to work with our customers, restructuring some contracts and moving some of our backlog into 2010."

Bucyrus' surface mining equipment sales increased 9.5% in the recent quarter compared with the same period in 2008.

The increase was driven primarily by a boost in the aftermarket parts and service business in Chile and Australia. There were also moderate increases in aftermarket equipment sales to mines in Brazil and China, offset by a decline in Canadian sales.

Combined, Bucyrus and Joy Global have billions of dollars worth of equipment already in use -- which bodes well for the aftermarket parts and service business.

"Even with some uncertainty in commodity prices in the marketplace, people are still using our machinery on a daily basis, which means they're still requiring spare parts," Sullivan said. "So we're very bullish about our aftermarket opportunities."

Bucyrus expansion in South Milwaukee is essentially complete, according to Sullivan.

The expansion almost doubled the company's capacity to manufacture parts, and it can now build at least 24 electric mining shovels a year.

Next year, Sullivan said, the company will consider making improvements to its Milwaukee plant.

"This was another solid quarter for Bucyrus, and we expect to see continued growth in earnings in 2009 despite the decline in commodity prices," said analyst Charles Brady with BMO Capital Markets.

"Of greater concern is the 2010 outlook and the extent that orders in 2009 fill in the backlog as it is worked off," Brady said, adding that Bucyrus should benefit from higher demand for coal later this year and into 2010 and 2011.

After the earnings release and conference call, Bucyrus shares closed at $20.13, up $1.39.

Bucyrus International

1st quarter %â??â?? 03/31 2009 2008 change Sales $605.7 $517 17.2 â?? Net income 56.9 41.1 38.5 â?? EPS (diluted) 0.76 0.55 38.2 â??

Figures in millions except for earnings per share. Percentages are based on unrounded sales and income figures.

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